HomeMy WebLinkAbout07-20-2006 Housing & Community Development Commission
AGENDA
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
LOBBY CONFERENCE ROOM, CITY HALL
THURSDAY, JULY 20, 2006
6:30 P.M.
1. Call Meeting to Order
2. Approval of the April 20, 2006 Minutes
3. Public Comment of Items Not on the Agenda
4. New Business
. Community Land Trust Presentation - The Housing Fellowship
. Discussion of HCDC Bylaws, Specifically Article 4, Section Band
Article 6, & Application Form
. Review of Allocation Process - Creation of Subcommittee
. Discuss Inclusionary Zoning
. Announce Upcoming HCDC Vacancies
5. Old Business
. Discuss National Community Development Week Celebration
. Review the Downpayment Assistance Program
6. Monitoring Reports
. City of Iowa City - Economic Development Fund (Greazel)
. Goodwill Industries - Facility Rehabilitation (Mellecker)
. Planned Parenthood - Facility Rehabilitation (Mellecker)
. City of Iowa City - Housing Rehabilitation (Mellecker)
. City of Iowa City - Downpayment Assistance (Mellecker)
. Iowa Valley Habitat for Humanity - (Greazel)
7. Adjournment
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CITY OF IOWA CITY
MEMORANDUM
Date:
July 14, 2006
To:
From:
Housing and Community Development Commission
Community Development Staff
HCDC Meeting on July 20, 2006
Re:
The July HCDC meeting will include all of the items that were to be discussed in May & June
with the addition of one agenda item; the review of the HCDC bylaws and application form.
Please bring your May and June packets to the meeting. If you no longer have the packets, the
information can be obtained by downloading from the following website:
www.icgov.org/boardminutes.asp?ID=17 or please contact staff to forward the materials to you.
As you may already know, on May 2 the City Council approved the FY07 Annual Action Plan as
recommended by HCDC. A copy of the approved FY07 Action Plan budget was included in the
May packet for your information.
The following is a short description of the July agenda items. If you have any questions about
the agenda or if you are unable to attend the meeting, please contact Tracy Hightshoe at 356-
5244 or by email at tracy-hightshoe@iowa-city.org.
New Business
Community Land Trust Presentation - The Housing Fellowship
Maryann Dennis, Director of The Housing Fellowship, will present information on community
land trusts and will discuss how The Housing Fellowship has worked with land trusts to ensure
permanent affordability for owner-occupied homes.
Discussion of HCDC Bylaws and Application Form
The HCDC Bylaws state that, when possible, persons with construction and finance expertise
and one person who receives rental assistance shall be appointed to HCDC. The application
also requests applicants to identify if they are a senior citizen, person of color, low income,
disabled, receive rental assistance or a member of the Local Homeless Coordinating Board. As
HUD no loriger requires membership criteria on local advisory commissions, we will need to
discuss. Please see the memo from Sue Dulek, Assistant City Attorney, regarding membership
criteria and the application form.
Review of the Allocation Process
With the FY07 allocation process fresh in your mind, staff is interested in hearing your
suggestions for next year. Last year a subcommittee was created to review the process and
recommend changes to the allocation process. There were some substantial changes made to
the process this year, such as separate applications and ranking systems for different funding
categories. The committee may decide to appoint a subcommittee for further review or simply
offer suggestions for next year.
Discuss Inclusionary Zoning
The commission will discuss the process of reviewing inclusionary zoning. At the July meeting
the commission will discuss a process, timeline, and information necessary to formulate a
recommendation to City Council. Upon consideration of inclusionary zoning, the commission
may decide to recommend, not recommend or to make no recommendation to City Council.
The August agenda will include the discussion of design guidelines and inclusionary zoning.
July 14, 2006
Page 2
There will be a late summer/early fall agenda item regarding the financial investment policy. As
a reminder, when reviewing inclusionary zoning, planning and zoning staff will also need time to
review and research before HCDC makes a recommendation to Council.
Upcoming HCDC Vacancies
Bill Greazel and Michael Shaw's terms expire September 1, 2006. If interested in reapplying,
please submit your application to the City Clerk before July 26, 2006.
Old Business
National Community Development Celebration
The committee will provide an update at the July meeting.
Review of the Downpayment Assistance Program
The City received $30,000 in FY06 CDBG funds for a down payment assistance program to
income eligible households. As of July 14, 2006 no funds have been disbursed under this
program. HCDC will review the program to consider program revisions, a time extension, or to
recommend the recapture of funds.
Monitoring Reports
. City of Iowa City - Economic Development Fund (Greazel)
Contact Tracy Hightshoe at 356.5244
. Goodwill Industries - Facility Rehabilitation (Mellecker)
Contact Mike Townsend at 337.4158
. Planned Parenthood - Facility Rehabilitation (Mellecker)
Contact Krista Noah at 354.2044
. City of Iowa City - Housing Rehabilitation (Mellecker)
Contact David Powers or Jeff Vanatter at 356.5230
. City of Iowa City - Downpayment Assistance (Mellecker)
Contact Steve Long at 356.5250
. Iowa Valley Habitat for Humanity - Homeownership (Greazel)
Contact Mark Patton at 337.8949
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CITY OF IOWA CITY
MEMORANDUM
Date: July 11, 2006
To: HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
From: SUSAN DULEK, ASS'T. CITY ATTORNEY'
Re: BY-LAWS AND APPLICATION FORM
Recently a City Councilor inquired into the practice of asking applicants to HCDC whether, for
example, they are persons of color and recipients of rental assistance. Attached is a copy of
page 4 of the current application form.
The origin for the language in the application is probably the bylaws, a copy of which I am also
enclosing. Article 5/Section B of the bylaws provides:
In order to satisfy the purpose and intent of this citizen commission as required by the
U.S. Department of Housing and Urban Development, when possible, at least one
person shall be appointed to the [HCDC] with expertise in construction and at least one
person with expertise in finance. In addition, when possible, the [HCDC] shall include
one person who is a member of the Local Homelessness Coordinating Board, and one
person who receives rental assistance.
Please note the introductory phrase that states "as required by [HUD]." Perhaps HUD had such
a requirement in 1995, but there is no such present regulation. In distributing HOME funds, the
City must, as a "participating jurisdiction," follow its citizen participation plan, which is part of the
consolidated plan, a/k1a City STEPS. 24 C. F. R. 91.100-.115. The City's citizen participation
plan does not require certain groups to be represented. Tracy Hightshoe also inquired about
this, and HUD staff confirmed that the only current requirement of this nature is citizen
involvement in the consolidated plan.
The City Council resolution establishing HCDC, Resolution No. 95-199, a copy of which is
enclosed, also does not impose any such requirement.
As a result, there is no reason for the application to ask about skin color, age, income, or
disability, and I have recommended to staff that the application form be modified accordingly.
Additionally, given that HUD has no requirements, I suggest that the bylaws be amended to
delete the reference to lias required by [HUD]."
Although there is no legal prohibition against maintaining the present membership criteria in the
bylaws, HCDC may want to discuss how the "when possible" is implemented. Because City
Council does not, for example, recruit a person with expertise in finance or construction, it is
unclear to me how word gets out, so to speak, that a finance person is desired. In contrast, the
Board of Appeals must include members of a specific trade or profession including a plumber
and electrician. When the "plumber slot" is open, the City then specifically recruits plumbers.
One downside is that the position remains open on the Board of Appeals until a plumber applies
and is appointed.
If HCDC does wish to amend the bylaws, please review Article 6. The bylaws will need to be an
agenda item, as it is on July 20. At that meeting, the proposal can be discussed. At the
following meeting, there will be a vote on the proposal. The two-meeting procedure is unusual.
July 11, 2006
Page 2
Additionally, bylaws usually require notification to all members of the proposed amendment. I
am enclosing an excerpt of the Senior Center Commission bylaws that contains a more
common amendment provision. HCDC may want to consider changing this provision as well.
If HCDC does pass a motion to amend the bylaws, the amendment is not effective until
approved by City Council. First, the two-member Rules Committee of the City Council will
review the proposed change and then Council will consider the proposed amendment.
I will be at the meeting on July 20 to answer any questions you may have about the bylaws.
Ene.
Copy to:
Steve Long-w/enc.
Tracy Hightshoe-w/enc.
TABLE OF INCOME GUIDELINES AND DEFINITIONS FOR IOWA CITY
Effective February 1', 2005
/ousehold I 30% Median Income 50% Median 60% Median 80% Median Income Median
I Size (Poverty Level) Income Income (low income) Income
1 $15,250 $ 25 ,400 $30,500 $40,600 $50,800
2 1 7,400 29,000 34,800 46,400 58,000
3 19,600 32,650 39,200 52,200 65,300
4 21,800 36,300 43,600 58,000 72,600
5 23,500 39,200 47,000 62,650 78,400
6 25,250 42,100 50,500 67,300 84,200
7 27,000 45,000 54,000 I 71,900 90,000
8 28,750 47,900 57,500 76,550 95,800
ATTACHMENT TO APPLICATION FOR THE
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
IN ORDER TO ENSURE THAT THE HOUSING AND COMMUNITY DEVELOPMENT COMMISSION IS
REPRESENTATIVE OF THE COMMUNITY AND THE GROUP(S) WHICH IT SERVES, AS REQUIRED BY THE U.S.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, PLEASE INDICATE IF YOU ARE A MEMBER OF
ANY OF THE FOLLOWING CATEGORIES:
D Senior Citizen (62 or older)
[[] Handicapped or Disabled
D Person of Color
D Receive Rental Housing
Assistance
[1J Lower Income (see table)
D Member of the Local Homeless
Coordinating Board
Your response is voluntary, and you may wish instead to elaborate on or indicate areas in which
you can make a special contribution to the Commission in another section of this form.
When possible, Council will appoint a person or persons with expertise in construction and/or
finance, a person receiving rental assistance, and a person from the Local Homeless Coordinating
Board.
If you have expertise in construction or finance, please describe your experience an~r training.
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HCDC Application
February 2005
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Section A. The name of the Commission is the Housing and Community Development
Commission of Iowa City, Iowa, as established by R~solution No. 95-199 of the City Council
of Iowa City, Iowa, pursuant to Chapter 403A, Code of Iowa (1995).
BY -LA WS
ARTICLE 1 - THE COMMISSION
ARTICLE 2 - PURPOSE
Section A. The purpose of the Commission is to assess Iowa City's community development
needs for housing, jobs, and services for low and moderate income residents, and to promote
public and private efforts to meet such needs.
ARTICLE 3 - DUTIES
Section A. Duties of the Commission shall include: 1) assess and review policies and
planning documents related to the provision of housing, jobs, and services, for low and
moderate income residents of Iowa City; 2) review policies and programs of the Public
Housing Authority and Community Development Division and make recommendations
regarding the same to the City Council; 3) review and make recommendations to the City
Council regarding the use of public funds to meet the needs of low and moderate income
residents; 4) actively publicize community development and housing policies and programs,
and seek .public participation in assessing needs and identifying strategies to meet these
needs; 5') recommend to the City Council from time to time amendments, supplements,
changes, and modifications to the Iowa City Housing Code.
ARTICLE 4 - MEMBERSHIP
Section A. The Housing and Community Development Commission shall consist of nine (9)
members appointed by the City Council of Iowa City. All members shall be qualified electors
of the City of Iowa City, Iowa, and shall serve as such without compensation but shall be
entitled to the necessary expenses, including traveling expenses incurred in the discharge of
their duties.
Section B. In order to satisfy the purpose and intent of this citizen commission as required
by the U.S. Department of Housing and Urban Development, when possible, at least one
person shall be appointed to the Housing and Community Development Commission with
expertise in construction and at least one person with expertise in finance. In addition, whefl
possible, the Commission shall include one person who is a member of the Local Homeless
Coordinating Board, and one person who receives rental assistance.
Section C. The term of office for each member shall be three (3) years. In order to ensure
a staggered turnover, initial appointments shall be three (3) members for each of one, two,
and three years respectively.
Section D. The Chairperson and Vice-Chairperson will be elected annually (in September) from
the Commission membership. The Chairperson shall, when present, preside at all meetings,
appoint sub-committees with the approval of the Commission, call special meetings and in
general perform all duties included in the office of a Chairperson and such other duties as may
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2
be prescribed by the members from time to time. The Vice-Chairperson shall take over the
above duties of the Chairperson in the event of the Chairperson's absence.
Section E. Three (3) consecutive, unexplained absences of a member from regular meetings
will result in a recommendation to the City Council from the Commission to discharge said
member and appoint a new member.
Section F. If a position becomes vacant by reason of resignation or otherwise and results in
an unexpired term the Council may choose to fill the unexpired term in such a manner that
the appointee shall continue in the position not only through the unexpired term but also
through a subsequent regular term.
ARTICLE 5 - MEETINGS
Section A. Meetings of this Commission shall be on a regular monthly basis. A meeting date
and time will be established t?y the Commission. A regular meeting may be cancelled if no
urgent business requires a meeting. .
Section B. Special meetings of the Commission may be called by the Chairperson and shall
be called by the Chairperson at the request of a majority of the membership.
Section C. Meetings shall be held in an accessible, public meeting place. Notices of meetings
(agenda) for all regular and special meetings shall be posted and distributed to members and
the media at least 24 hours before any meeting is held. All provisions of the State Open
Meeting Law shall be followed. The Chairperson or a designated representative, together with
appropriate members of the City staff shall prepare an agenda for all meetings. Agendas shall
be sent to Commission members at least three (3) days prior to the regular meetings.
Section D. A majority of the members of the Commission (five or more) shall constitute a
quorum of any meeting and the majority of votes cast at any meeting, at which a quorum is
present, shall be decisive of any motion or election.
Section E. There shall be no vote by proxy.
Section F. Time shall be made available during all regular meetings for open public discus.sion.
Section G. Minutes of all meetings shall be prepared and distributed to the City Council within
three (3) weeks of the meeting in the manner prescribed by the Council. Minutes of all regular
and special meetings will be mailed to all the Commission members during the week prior to
the next meeting. Specific recommendations for the Council shall be set off from the main
body of the minutes.
ARTICLE 6 - AMENDMENTS
Section A. The By-Laws of the Commission shall be amended only with the approval of at
least a majority of the Commission (at least five votes) at a regular meeting or a special
meeting.
Section B. Policy changes or By-Law changes may be adopted at the meeting following the
meeting at which open discussion was conducted on the specific changes.
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RESOLUTION NO. 95-199
RESOLUTION ESTABLISHING A HOUSING AND COMMUNITY DEVELOPMEN.
COMMISSION FOR THE CITY OF IOWA CITY, IOWA, AND REPEALING
PREVIOUS RESOLUTIONS ESTABLISHING THE HOUSING COMMISSION AND
THE COMMllTEE ON COMMUNITY NEEDS.
WHEREAS. the City Council of the City of Iowa City has adopted a Consolidated Plan for
housing, jobs, and services for low and moderate Income persons; and,
WHEREAS, the U.S. Department of Housing and Urban Development requires ongoing citizen
participation In matters relating to the Consolidated Plan whose goal is to help families and
individuals to achieve their highest level of self-sufficiency; and,
WHEREAS, it Is In the public Interest to combine the functions and duties of the Iowa City
Housing Commission and the Committee on Community Needs; and,
WHEREAS, said Commissions will be dissolved on August 31,1995, and be replaced with the
Housing and Community Development Commission established herein effective September 1,
1995; and.
WHEREAS. the City Council of the City of Iowa City deems it in the public Interest to establish
a Housing and Community Development Commission for the City of Iowa City, Iowa. to advise
the City Council on matters relating to housing and community development issues for low and
moderate income residents; and,
WHEREAS. the purpose of said Commission shall be to assess Iowa City's community
development needs for housing, jobs, and services for low and moderate income residents, and
to promote public and private efforts to meet such needs.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF IOWA CITY,
IOWA. that:
1. The Iowa City Housing and Community Development Commission Is hereby established.
2. The Housing and Community Development Commission of the City of Iowa City shall have
purpose, duties, membership and terms defined In the By-Laws of said Commission.
3. The Iowa City Housing and Community Development Commission shall be established on
Saptember 1, 1995.
4. Resolution No. 70-121. Resolution No. 76-136, and Resolution 1109 are hereby revoked,
repealed. and rescinded and set aside and held for naught as of August 31,1995.
Passed and approved this 18th day of
July
,1995.
ATfEST:/Jt~ ~ ~
CITY CLERK
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It was moved by Pigott and seconded by
adopted, and upon rol~ call there were:
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the Resolution be
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/ECTION 6 AMENDMENTS
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Amendments to the BY-Laws
These By-Laws may be amended or repealed and replaced by vote of at least
five Commission members at any Commission meeting. Any proposed changes
to these By-Laws shall be submitted to the Commission at least 14 days prior to
such vote. Following Commission approval, all amendments to the By...Laws must
also be approved by the Iowa City City Council at which time they become
effective.
srctr\seniorcenterbylaws9-03.doc
9/5/03
5
MINUTES
HOUSING AND COMMUNITY DEVELOPMENT COMMISSION
THURSDAY, APRIL 20,2006,6:30 P.M.
EMMA J. HARVAT HALL, CITY HALL
PRELIMINARY
Members Present:
Jerry Anthony, William Greazel, Matthew Hayek, Kelly Mellecker, Thomas
Niblock, Brian Richman, Michael Shaw
Staff Present:
Public Present:
Tracy Hightshoe, Steve Long
Bob Burns, Dan Garrett (Iowa Equity Fund), Krista Noah (Planned Parenthood)
Call Meetina to Order
Anthony called the meeting to order at 6:30 p.m.
Aooroval of the March 9. March 23. and March 29. 2006 Meeting Minutes
MOTION: Hayek moved to approve the minutes as submitted. Mellecker seconded, and the motion
carried on a vote of 6-0.
Greazel arrived at this point.
Public Comment of Items not on the Aaenda
Richman asked if the commission should reconsider allocations in light of the recent tornado. Long asked
if he had suggestions. Richman said he did not have any particular suggestions, and he has not heard
any assessment of damages to public facilities. He said his question centers on whether there are other
priorities now.
Long said people are still trying to assess the damage, so very little is known at this point and funding
gaps are unknown. He said the city is working with The Housing Fellowship with their damages, since
CDBG funds were involved in some of their projects. Greazel noted the funds which were held back
during allocations are still available, and the commission could consider future applications. Long said the
city is still waiting to hear from the federal government on whether the area will be declared a disaster
zone. If so, some requirements for applications are waived and money could be shifted around more
easily. Otherwise, projects need to go through the normal application.
Anthony asked what the timeline is for the disaster area designation. Long said it could be up to 30 days.
He said the city has not heard from non-profits regarding desired funding or if they received any
damages. Hayek said he had heard several of the rental houses on Iowa Avenue were underinsured, so
there may be gaps in that area.
Anthony said there is a request to have the Iowa Equity Fund presentation before discussion of the
annual action plan. He asked if there were any objections from commission members. There were no
objections.
Presentation bv the Iowa EQuitv Fund Reaardina Low Income Housina Tax Credits
Garrett introduced himself as a representative from the Iowa Equity Fund. The Fund is a non-profit tax
credit syndicate that buys tax credits on affordable housing projects. The Fund is part of a larger company
called Midlands Housing Equity Group, based in Omaha, Nebraska.
Garrett said the state awards the tax credits for low-income projects, and the required compliance period
in Iowa is15 years, though an extended period is an option. The Fund is designed to help those with low
to moderate incomes. It actually consists of four funds with four offices. Iowa Equity has two funds, and
his area, called Fund Two, is handling about $20 million this year. They have syndicated projects all over
the state for both historic and adaptive rehabilitation, and assisted living. They have just completed their
second assisted living project and plan to do four smaller ones this year.
Garrett said tax credits are very competitive, so the Fund would like to get in on the ground floor. The
Fund's greatest offering is that it is local. The national syndicators are aggressive, and there is more
money available. He said the Iowa Equity Fund is trying to work with people who might need the services
and get in on the ground floor.
Housing and Community Development Commission Minutes
April 20, 2006
Page 2
Garrett said the Fund is asked by an investor to help non-profits with existing stock turn them into tax
credit projects. What happens is that a limited partnership is created, with the syndicate holding 99.99
percent ownership. The non-profit sells the project to the limited partnership, and holds .01 percent
ownership. The resultant tax credit equity helps with rehab done on the unit, and builds a reserve. Also,
tax-exempt properties become taxable. There is a formula for calculating affordable housing tax credits
based on state code, so it is not the same as becoming 100 percent commercial.
Garrett said the tax credit money, which covers typically 60 percent of the project costs, is not public
money. It is investor money, such as with Wells Fargo, Bank of the West, and Fannie Mae. They get
dollar for dollar tax credits on their returns. Hayek asked how much money comes back to the investors
per tax credit dollar. Garrett said when he started five years ago they were at about 72 cents for every
dollar. Burns said it was approximately 42 cents on the dollar in the late 1980s, but investors wanted
higher returns. Garrett said he is now doing about 92 cents, which is lower than the national average
because the company is very conservative. He added it is possible to get over a dollar in some areas.
Hayek asked what happens to the property after 15 years. Garrett said the affordability period is at least
15 years. At the end of that period, the property can be sold back to the non-profit organization for the
balance of the outstanding debt. At that point they could be put back into the tax credit program.
Richman asked if the unit would need to apply for additional dollars for rehab after 15 years. Garrett said
it is a possibility. Greazel noted that projects presented to the commission usually have an affordability
period of 30 or 40 years. Garrett said the limited partners are only interested in the first 15 years, but
there is an option to extend affordability. The investors only get tax credit up through year 10. The
syndicate is done after 15 years.
Greazel asked who keeps track of affordability after 15 years. Garrett said the Iowa Finance Authority is
the agency that awards tax credits. If the property goes back to the non-profit, they would be responsible
for keeping up the affordability. Otherwise, the unit can be sold with an easement kept to retain
affordability. Richman asked if the city could require a longer period of affordability. Garrett said yes, but
the affordability requirements are already stringent, and they are monitored closely because there is a lot
at stake.
Garrett said his syndicate has placed $300 million of funding since its beginning. Though that might seem
like a lot, there are national companies that have done well over a billion. There is a lot riding on keeping
up with the requirements and keeping the books straight. Files are audited every year.
Long asked for an explanation of the local commitment. Garrett said the Finance Authority requires a
local commitment to indicate the local entity is behind the project, either in the form of a direct placement
of money or tax abatement. Then the city also has to give a written resolution and letter of support. The
local contribution has to be a certain percentage of the project cost.
Long asked if the local monetary support could be from the county if the project is in the city. Burns said
the city needs to support the project to get the application points, but the funds can come from the county.
Garrett said more projects are funded at four percent credit level because there is so much competition at
the nine percent level.
Hayek asked what participation is needed at the municipal level other than supporting the project. Garrett
said it depends on the entity. Some have given direct contributions or tax abatements. One good thing
about moving forward with it at this point is having the opportunity to think through all these decisions
rather than when putting together the materials in August. Applications are due in November.
Dennis asked for explanation of what investors want to see in terms of development project numbers for
Iowa Finance Authority applications. Garrett said the Iowa Finance Authority is the one charged with
overseeing the program and awarding the credits. A certain amount of money should be put aside per
unit per year for the reserve. However, his syndicate requires a higher amount to be kept in reserve than
the Finance Authority, and the amount depends on the project. The Finance Authority releases reserves
after seven years, but the Fund does not. The Fund is very conservative, and the investors expect care to
be taken to look for good projects in good markets at good rents.
Housing and Community Development Commission Minutes
April 20, 2006
Page 3
Dennis asked for clarification on individual items on the budget. Garrett said usually 60 percent are hard
construction costs, while 40 percent are soft costs such as accounting, attorneys, and reserves. The
whole process is very complicated, and a lot is involved. At the same time, in similar projects, 60 percent
of the costs are covered by tax credits, which is a wonderful way to assist projects and keep them viable.
Greazel asked if 60 percent is paid when the project opens. Garrett said not necessarily. They try to make
projects as viable as possible. Greazel asked what average percentage debt is normal. Garrett said there
are no average projects because of the wide variability. The Fund requires a certain debt coverage ratio.
The Finance Authority requires that debt coverage ratio be met consistently throughout the 15 years.
Greazel asked what the acceptable vacancy rate is. Garrett said perhaps five to seven percent. He added
that vacancy always depends on price in his opinion.
Richman asked whether the Fund participates in scattered site projects, small units, or package deals.
Garrett said yes, they are comfortable with that.
Shaw asked for clarification where the Fund figures into the tax credit funding operation and how much
competition there is among the syndicates. Garrett said the non-profit applies for tax credits, which the
Fund then buys. Then the Fund gives the credits to investors. The syndicate does have control over the
project, and will assert that if necessary. However, generally the project is left for the organization to run.
The Fund has to make sure the project will work because they cannot afford to have a project go bad, so
will assert requirements if things are not proceeding well. There is a huge amount of competition in this
area. All the companies are good at what they do, so what it comes down to is what the developer can do
and the developer's performance record.
Garrett added that they are very concerned with keeping projects within compliance, and they are able to
enforce if necessary. Dennis noted that if the project is out of compliance, the investor stands to lose
credits for every year of the project, and have to pay back the money. The investor does have a strong
interest in keeping the project viable and in compliance.
Richman asked if there is a difference in price with scattered site projects. Garrett said no, it depends on
the developer. There is a certain economy of scale, but that can be balanced by other costs or savings.
There is no difference in their price.
Anthony asked who primarily invests with the Fund. Garrett said corporate entities. Hayek asked if
anyone with state taxes could invest. Garrett said it is based on federal tax. Both C and S corps could get
involved, but there is not much benefit to S corps. Anthony said the tax credit program is the largest
producer of affordable housing. It is a huge industry, which increases money for affordable housing.
Unfortunately, Iowa City has not received many tax credits in the past.
Consideration of a Letter of Support for the Use of General Obliaation Bonds
MOTION: Greazel moved to approve submitting a letter of support and Shaw seconded.
Hayek asked what the significance is of using General Obligation Bond (GOB) funding for a project like
this; that is, why use the GOB versus some other means. He also asked for clarification of whether the
letter of support refers to this project specifically or the concept of using these funds as a whole.
Richman said GOBs are supported by a property tax levy on all taxable property in the city. They are
authorized by voters, and then the property tax levy pays back the bonds. It is a low risk venture from an
investor standpoint, and the money raised can be used for various purposes. Eastman said up to $700K
can be issued without voter approval in Iowa City, and the proceeds can be used widely.
Shaw asked if $700K could be raised per year. Eastham said per instance. He noted this is not the first
time the city has used these funds for affordable housing, and that the Fellowship did not request funding
through the bonds. The City Manager suggested this route.
Richman asked if the Peninsula loan was through a GOB. Eastham said yes, the same structure was
requested for that project as the bond issue. Richman confirmed there was some risk to the city with the
Housing and Community Development Commission Minutes
April 20, 2006
Page 4
Peninsula project, whether the rents would be high enough to pay back the loan. Eastham said the city
manager was satisfied that the risk was acceptable.
Hayek asked if this would be the third project using these types of funds. Dennis said the Peninsula
project was a partnership, with the funds issued through a bond that was split between the Housing
Fellowship and the City of Iowa City Housing Authority. That was one bond, so this would be the second
one. She said the Fellowship did not ask for General Obligation Bond funding. The Fellowship asked for
suggestions on how to fund their project apart from using CDBG funds, and Steve Atkins said the GOB
was a good way to go.
Hayek asked if the Finance Department approved this funding. Long said yes. Hayek noted he also would
like confirmation whether this letter of support is for the general concept of using General Obligation
Bonds for this type of project, or if it would support this project in particular.
Greazel asked for clarification of what would happen to the funds. Eastham said they would be paid back.
Dennis said the bond would be issued to a limited partnership rather than directly to the Fellowship. They
would then pay back the bond, private financing, and all of the other hard debt. Debt is repaid from
renting those units. This partnership would be for this project alone. Eastham said there is no bank
financing proposed on the project at this point.
Hayek asked if there is a reason this sort of project is suited for these funds, rather than supporting new
acquisition. Long said funds are dwindling, so this is a way to find alternative funding. Hayek asked if this
would be a way to find additional funds for multiple projects every year. Hightshoe said it is evaluated on
a case-by-case basis. These units are nearing the end of their periods of affordability, so this is a way to
extend their affordability. Garrett said using these funds would be a good way to do the project. State
HOME funding is too competitive.
Hightshoe said GOBs have been used for various affordable housing projects in the past such as D&K
properties (Successful Living) and the peninsula project. Eastham said this is a way to lower rents, and
the units also contribute property tax.
VOTE: The motion carried on a vote of 6-0, with Richman abstaining.
Richman said he did not abstain because of concerns with this particular project, but because he is not
fully aware of other projects the city needs to finance that could be covered by General Obligation Bond
funding.
Review the FY07 Annual Action Plan
Long distributed summaries of the allocations approved at the March 23 meeting. Summaries of the
projects need to be submitted to HUD. He gave an overview of the parts of the packet, and asked the
commission members to review the information.
Shaw asked for clarification on what the shaded versus unshaded portions of the map signified. Long
noted there was no key. Hightshoe said the areas with the small dots are those areas outside the city's
corporate limits. Census tracts do not always follow the city's corporate limits.
Niblock asked what the turnaround is with HUD. Long said the application must be submitted to HUD by
May 15 and the funding is available July 1. Anthony asked if it would be a line of credit or actual money
deposited into the bank. Long said it is a line of credit. The recipient must expend funds, the City
reimburses the eligible expense, and then draw downs the funds from HUD.
Anthony asked on page 28 under Geographic Distribution of Resources, if having a scattered site policy
invalidated one of the statements. Shaw said the entire project is community-wide projects, not just
housing, so it qualifies. Long agreed. Long said a recommendation is needed for the council.
MOTION: Niblock moved to recommend the Annual Action Plan as summarized. Greazel seconded, and
the motion passed on a vote of 7-0.
Housing and Community Development Commission Minutes
April 20, 2006
Page 5
Long noted that some organizations are lobbying the council to receive the funding that was held back
during allocation.
Discussion of the Community Develooment Celebration
Hightshoe said this is an annual event recognizing each organization that will be receiving CDBG/HOME
funding in the upcoming fiscal year. It is also an opportunity to highlight prior CDBG/HOME funding in our
community. She suggested having the celebration at the new Grant Wood School facility. Hayek agreed
that is a good idea. Hightshoe asked for volunteers for a planning committee. The committee members
would decide where and when to have it, who to honor, and other details. City staff would then make the
arrangements. Anthony, Mellecker, and Shaw volunteered.
Discussion of FY07 Potential Aaenda Items
Anthony said there are three pieces of information that will probably be discussed at the next meeting. He
asked city staff to discuss the design guidelines.
Hightshoe said the guidelines have been discussed in the past. The city's interest is to have some
reference document to use when discussing requirements for new housing construction. City staff request
HCDC approved criteria when reviewing housing plans assisted with CDBG/HOME funds. The document
would serve as a simple guideline in hopes that new housing will fit into the neighborhood where it is built.
Design guidelines would help to reduce NIMBYism as the resulting house would not be easily recognized
as subsidized and may reduce fears about what type of housing will be placed into someone's
neighborhood.
Long said that all agreements with housing providers require that city staff review building designs.
However, there are no criteria established, so changes are difficult to justify. Hightshoe said some
guidelines from other communities can be reviewed such as those from the Springfield, MO (included in
this month's packet for review). Staff's intent is to develop generalized guidelines so that assisted housing
fits into the neighborhood where it is built, with some basic requirements such as each single family home
must have access from the street, utility hookups must be on the side or back of the home, etc.
Shaw asked for confirmation that staff would like to have guidelines and the recommendation would be to
give them that guidance. Hightshoe said yes, some established criteria for FY08, since it may be too late
for FY07 projects. Staff would like to have some consistency in how projects are reviewed.
Anthony said the other items are inclusionary zoning and housing. He asked that the commission
members read the enclosed information on inclusionary zoning for the next meeting. Also, hopefully some
developers could be invited to give their viewpoints on inclusionary zoning to add to the discussion.
Shaw asked whether time should be specified and set aside for each issue ahead of time. Anthony
suggested inclusionary zoning should have its own meeting, because there are a lot of people who have
opinions about the matter, both pro and con. Richman asked if there are other stakeholders besides
affordable housing developers that the commission should hear from. Anthony said private market
developers and landowners. Richman suggested also neighborhood groups.
Anthony said there is a lot of Iiter~ture written about inclusionary zoning, both in support and against it.
Richman asked how to reach out to the other stakeholders. Hightshoe said invitations can be extended.
City staff could work with the commission to determine who to invite.
Shaw asked whether the commission should spend time just to have a discussion about items, or if the
commission should focus on what types of recommendations should be made to the council and discuss
only those. Anthony said the commission should have a discussion about the issues, and if the members
agree that a recommendation to the council is needed, then go ahead and make it.
Anthony suggested taking up as many of the issues over the summer as is feasible, including members of
the community, then making a recommendation to the council if the commission feels it is warranted.
Shaw asked for clarification on the timeline to finish the discussion phase and move back into funding.
Anthony said the funding cycle starts up in November, reviewing score sheets and application. CITY
STEPS needs to be reviewed in late summer/early fall, which does not take too long, so the commission
has time to discuss through November.
Housing and Community Development Commission Minutes
April 20, 2006
Page 6
Hightshoe said it would be good to have all recommendations be made together, so they are consistent.
Anthony noted the recommendations should be given to council early enough that they can act upon
them before applications are sent out. In that case, discussion should be finished in September or
October.
Hayek said this is a big undertaking, and time goes quickly. Shaw agreed, saying that is why he would
like to consider the timeline before starting. Mellecker asked how specific the recommendations on design
guidelines would be. Anthony said that would have to be decided during the discussion. Hayek said the
commission could discuss and decide that design guidelines are a good idea, and then ask staff to come
up with something for the commission to review. However, there are also policy issues that are related
that need to be discussed.
Anthony agreed that looking at the policy level would allow the discussion to move faster. Greazel said
the two things go hand in hand. Hayek said there are people who would have a problem with both
policies. Shaw said he would like to have some ideas about the scope of the discussion, to help with
staying focused.
Hightshoe asked what would be placed on the fiscal year 2007 agendas. Anthony asked whether there
are any items anticipated besides what the commission was reviewing. Hightshoe said no. Anthony said
he would put together agenda information and send it out. Greazel said he would like to have a review of
what the commission did for the past few months. Also, there was some discussion of focusing on certain
issues. Richman said it would be good to talk about potential priorities for the next funding round. Shaw
suggested talking about that first, since those decisions might help guide future discussions.
Anthony said the review should happen at the next meeting, and compare to previous years. Discussion
of goals could happen at the next meeting or after CITY STEPS is reviewed in August. Richman said
having it later is not ideal. Priorities need to be established, and that should happen sooner rather than
later. Anthony said CITY STEPS has not changed very much in recent years. He said that those two
items, along with a process discussion about inclusionary zoning, would be on the next meeting agenda.
Then the actual discussion about inclusionary zoning would occur in June, which would give time to notify
interested parties.
Discussion of FY06 Proiects that have not Performed per the Unsuccessful or Delaved Proiects Policv
Hightshoe said council policy states that CDBG projects are encouraged to spend at least 50 percent of
their funds by March 15. CDBG is evaluated based on timeliness, so the city would like CDBG recipients
to complete their projects by the end of the fiscal year. All of the agencies on the list have been contacted
for updates.
Noah said she is with Planned Parenthood, and director of securing facilities. She reported they are on
track per their original request to start paving the parking lot, but they are trying to find the best bid. After
the paving is complete, then the entrance will be moved and the other interior improvements will be done.
She said they are confident that this will start by May 1 and be done by June 30.
Shaw asked whether a recommendation should be made before Noah leaves. Hightshoe asked whether
anyone would like to make a recommendation to recapture funding from Planned Parenthood. No
recommendations were made by the commission members.
Long said Goodwill recently completed their paperwork, so a check went out today. Hightshoe said
sometimes there is a difference between the project being completed and the request for reimbursement
being submitted.
Hightshoe said Old Brick spent half their funds. The restoration contractor expects to be done by May 15.
Hightshoe said the fire suppression system for Free Lunch was being installed today. That should be
done tomorrow. The flooring asbestos contractor came in, and the floor should be done this week. Free
Lunch is being held at other churches this week, so the floor needs to be done quickly.
Housing and Community Development Commission Minutes
April 20, 2006
Page 7
Greazel asked why the fire suppression system took so many months to do. Long said the whole lunch
program needed to be moved to another site, so they were timing it with Free Medical Clinic's move and
the floor replacement so they could get it all done at the same time.
Long said Hillel's project will start Monday. They had planned to be done by Passover, but hit a snag so
they held off so the door would not be out of commission during the holiday.
Hightshoe said staff is withholding funds to Compeer until a monitoring visit is completed. Staffs needs to
ensure Compeer is meeting the mandatory income reporting requirements. They are spending the
money, but they have to keep adequate time records and have to get client intake information. The client
can refuse to give income information, but that has to be documented. Due to the nature of the clientele
served, staff doesn't have a concern that the clientele served does not qualify as low-to-moderate
income, just that they must meet all accounting and client intake requirements.
Hightshoe said Extend the Dream says money has been spent and will submit a reimbursement shortly.
MonitorinQ Reports
Hayek said his information on Hillel is as Long reported. They did not want to tie things up during
Passover, and they expect to be done by May 1. The project involved a power door in the rear of the
building and upgrades to the bathrooms.
Hayek said Extend the Dream says the money has been spent. They hired a work-study for 15 hours a
week last year, and the salary was paid in part with this funding. That person coordinated e-commerce
training programs at the new facilities. Also, all is well with the rental housing. Long noted one person
runs everything with the organization, and he is swamped. Hightshoe added they have spent their money
based on a call to their Director, but they had not sent in a request for reimbursement until today. Staff
has not reviewed it yet.
Long said the Iowa City Down Payment Assistance has not spent any money. Hills Bank is the lender in
charge of this project, and they say most lenders will now do 100 percent financing through two
mortgages, with the down payment essentially a second mortgage on the house. Greazel asked if they
anticipate not needing the money. Richman said it does not seem the program is being marketed.
Richman asked what happens if the money is not spent by June 30. Hightshoe said that is the question
for the commission. Long said that no projects are overspending, so contingency funds are not needed.
The commission could give it until June 30 and ask them to step up marketing or the city could recapture
the funds for another project(s).
Richman said if there is no need for it in the community, there are probably other projects that could use
the money and the funds should be recaptured. Long said if there is a national declaration of a disaster
area, this is one pot of money that could be reallocated. He added that the bank said increasing the
award amount to $10K might make it more attractive.
Shaw asked if there is a reasbn that lenders would stop financing 100 percent in the next few months.
Richman said the advent of 100 percent financing is recent. Greazel said he has also seen more
repossessions by financial institutions in the past year than in the previous 20 years. Previously, if
someone was having financial problems, they would sell the house themselves and take what equity they
could get before it was repossessed. Now, people are so far behind that they are not bothering. The
lenders are being very aggressive, even though the market is very loose right now.
Richman suggested considering whether to recapture the funds at a later meeting.
MOTION: Richman moved to extend the compliance period for all projects to June 1 and reconsider
recapturing funds from the Iowa City Down Payment Assistance program at the June meeting. Hayek
seconded and the motion carried on a vote of 7-0.
Housing and Community Development Commission Minutes
April 20, 2006
Page 8
Richman reported all work on the Neighborhood Centers has been completed. They installed countertop
style desks with cabinets in the offices, which has really helped with their office space a lot. All money is
expended.
Adiournment
MOTION: Hayek moved to adjourn. Mellecker seconded, and the motion carried on a vote of 7-0. The
meeting adjourned at 8:30 p.m.
s:/pcd/minutes/HCDC/2006/04-20-06. doc
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